The recognition that health care quality in the U.S. is suboptimal despite the high level of spending has led many private insurers and health benefit purchasers to take steps to create financial incentives for quality improvement and cost-efficiency. Recent studies suggest that Medicaid programs likewise are increasingly becoming engaged in so-called "pay for performance" targeting both managed care plans and providers. Moreover, both the Centers for Medicare and Medicaid Services and other stakeholders have called for Medicaid agencies to accelerate efforts to adhere to the tenets of value-based purchasing independently and in collaboration with the private sector. Despite this trend and the fact that more Americans receive insurance coverage through Medicaid than any other single program, studies of the impact of pay for performance in Medicaid are largely absent from the research landscape, with the exception of a few small experiments. Furthermore, Medicaid's unique population, provider base, and financing suggest that lessons learned about pay for performance in the context of commercial insurance or Medicare may not transfer easily. In particular, concerns about the effects of performance measurement and pay for performance on access to care for patients who face greater health risks, are sicker, more frequently disabled, and may have greater difficulty with adherence are particularly resonant in the context of the vulnerable Medicaid population. This project seeks to increase the evidence base around the implementation and effects of pay for performance in Medicaid by evaluating prototypical programs adopted by Medicaid agencies in three states and by conducting a survey to ascertain perception of and effects of these programs on physicians that serve relatively large proportions of Medicaid patients ("Medicaid-focused physicians"). Through a combined qualitative and quantitative approach the study will examine the risks and benefits of pay for performance in Medicaid across a diverse set of markets and strategies. The ultimate objective of the project is to increase the adoption of effective pay for performance and related value-based purchasing efforts in Medicaid. To increase the relevance of the research, an Advisory Panel will be convened to identify the concerns of Medicaid officials and ensure that the research addresses the most important questions from the perspective of its principal audience.